KUALA LUMPUR: A majority of developers expect property prices to continue climbing in the first half of the year in tandem with rising costs.
In a recent survey of members by the Real Estate and Housing Developers' Association Malaysia (Rehda), about 74% of respondents surveyed generally felt that prices would be on an upward trend, largely influenced by an increase in the cost of development.
Rehda president Datuk Seri Michael Yam said about 36% of the respondents said property prices might increase 10% to 20%, 31% expected prices to increase less than 10%, and 7% expected prices to increase more than 20%.
“The main reason cited was the escalation in land, building materials and labour costs. For example, steel bar price had climbed to RM2,589 per tonne in 2011 from RM2,285 in 2010, while cement had gone up to RM16.33 per bag in 2011 from RM15.64 in 2010,” he told a briefing yesterday on the Rehda Property Industry Survey for the second half of last year.
Two other main factors were the larger deposits required in obtaining housing development licences and the higher market demand.
The deposit for a housing development licence is now 3% of the estimated project cost instead of RM200,000 previously. The survey covered 148 companies or 15% of Rehda's 979 members, and they were selected from all the states in Peninsular Malaysia.
Yam said 63% of the respondents indicated that they planned to launch projects in the first half of this year. In comparison, 45% had launches in the second half of 2011.
“The top property types to be launched in the first half of this year are two-storey terrace houses, apartments and condominiums as well as service apartments,” he added.
The survey also reported that better sales were expected in the first half of this year compared with the preceding six months. About 67% of the respondents with planned launches in the period under review anticipated to sell 41% of their properties and above. Yam pointed out that this was despite the drop in confidence largely influenced by external factors. “Some of the external factors are the eurozone sovereign debt crisis, fragile US economy and volatility in commodity prices.
“Nevertheless, the Malaysian market is still buoyed by its relatively strong economy, low non-performing loans for the property sector and the Government Transformation Programme and the Economic Transformation Programme (GTP/ETP),” he said.
On challenges for the industry, Yam said the unsold designated bumiputera lots had been the main reason for unsold units recorded in the last four surveys, which were conducted every six months.
“The way forward in solving this is to have a policy for automatic release of designated bumiputera lots. This will enable such ideal units to be put in the open market instead of them remaining unproductive.”
“Additionally, more than half of the respondents believed that the real property gains tax would have an impact on the overall property market.
“Other than that, 48% of respondents reported that they faced financing issues but mainly in the end-financing for buyers due to buyers' creditworthiness as well as due to banks being more stringent in their lending policies,” he said.
Rehda Federal Territory branch chairman NK Tong said the 45% of respondents that reported launches in second half of 2011 represented a slight drop from the 58% in the first half of 2011.
“The average size per project launch has also declined to 145 units from 160 units for the period under review,” he said.
“Sales were encouraging for the period as more than half of respondents who had launches sold more than 40% of their launched units,” he said, adding that the majority of the units launched were landed properties, but Kuala Lumpur and Penang were more focused on strata-title properties.
Rehda announced that the first Malaysia Property Exposition for 2012 would be held from March 2 to 4 and would feature some foreign developers.
By The Star
Friday, January 20, 2012
New township offers synergy of family, work, business and leisure
The Trinity Group team shifted into high gear as 2011 drew to a close — and delivered a full schedule ahead for the much-awaited launch of The Zest Serviced Apartment @ Kinrara 9. Dreamed up to be the next prime address in Bandar Kinrara 9 offering an integrated location for family, work, business, leisure, and entertainment — The Zest @ Kinrara 9 became an anticipated reality at the official Key Handover Ceremony recently.
The company is right ahead of target with the completion of an integrated development that consisted of 20 units of shop offices, 24 units of retail outlets and 720 units of serviced apartments in the Bandar Kinrara 9 township development — with infusions of modern and contemporary architectural design.
“The launch of The Zest @ Kinrara 9 marks our foray as a serious contender and comprehensive player offering a gamut of services in the real estate industry,” said Trinity Group managing director Datuk Neoh Soo Keat.
Trinity Group’s long-standing commitment towards “building communities and enriching lives” is strongly reflected in its developer journey as it grew from strength to strength with each project. Its credo echoes the Malaysian government’s dedication towards ensuring quality and affordable housing to meet the needs of Malaysia’s growing population by matching demand and supply as well as providing efficient public utilities and services as well as a clean and livable environment.
Neoh added that Trinity Group wishes to redefine property development by bringing landmark projects that incorporate the best design, quality, technology and timely delivery. “As a forward thinking and customer-driven developer, we will ensure that all our new products offerings will set new benchmarks in terms of quality and value creation for our customers while remaining true to our aim of pursuing business activities in an ecologically-friendly manner.”
Housing and Local Government Minister Datuk Seri Chor Chee Heung was the guest-of-honour at the key handover ceremony. He said it was imperative for the Government and private sector to work together in order to create a competitive and sustainable housing industry.
“The partnership will benefit the homeowners as well as housing developers. I am pleased to see Trinity Group taking a leader role in raising the industry bar for private developers and employing the six thrusts in the National Housing Policy (NHP) as its guiding principle to achieving conducive and liveable environments and shared community infrastructure and foundation,” he added.
Being a resident or business owner in one of the units at The Zest Point means all-year access to amenities.
Trinity Group does not take community enhancement lightly; its service-focused vision spanning beyond property development is attested by its series of community projects such as a RM7mil access ramp, a RM3mil access road for The Z, and Malaysia’s first air-conditioned bus stop.
The ramp, linking the opposite side of the road and The Zest @ Kinrara 9 with the Bukit Jalil Expressway to lessen traffic congestion and commuting time, was launched by Chor.
Community development, to Trinity Group, is an on-going pursue. “We do not — and will not stop here. In the near future, we will undertake more development and community projects that are aimed to improve and enrich people’s lives”, said Neoh.
By The Star
Thursday, January 19, 2012
L&G seeks more landbank
KUALA LUMPUR: Land & General Bhd (L&G) is looking to expand its landbank in prime locations, said managing director Low Gay Teck.
“We are looking to acquire more land in prime locations in the Klang Valley, Johor and Selangor. We are also trying to venture north to Penang as the property prices at these places are good,” he said at a briefing on its high-rise condominium project, Damansara Foresta in Bandar Sri Damansara.
However, he did not reveal the size of its current landbank. He noted that sourcing for ideal land was not an easy task and was a challenge for the company.
Low said it was currently busy developing Damansara Foresta and Elements@Ampang (a luxury condominium project in Ampang). Both projects have a gross development value (GDV) of RM700mil each.
“We are also planning for a mixed residential development on 220 acres of land in Seremban.
“Based on our initial estimate, the project has a GDV of about RM550mil,” he said, adding that L&G had kick-started all relevant pre-development for the Seremban project, but actual work might only commence at the end of this year.
Low said the question of a property bubble was “relative”.
“It happened because of all the hype from certain projects when the prices have gone too high. We're not selling very speculative property projects,” he said.
Commenting on its project, Damansara Foresta, Low said it was a freehold residential property located next to the Bukit Lanjan forest reserve.
“The overall project site consists of 42 acres, whereby only 21 acres will be developed for residential developments, leaving the remaining as natural forest,” he said.
Low said L&G would be taking registration for the third block of its Damansara Foresta project in February.
“We have sold part of the phase 1.
“We are now opening registration for Block C. Block A is 99% sold while Block B is 95% sold.”
Phase 1 consists of four blocks ranging from 227 to 237 units for each block.
Each unit ranges from 1,400 sq ft to 1,600 sq ft to a luxurious penthouse of above 3,000 sq ft.
The selling price for phase 1 ranges from RM500 to RM600 per sq ft with a maintenance fee of 25 sen per sq ft.
Low said the property was designed with lots of natural activities such as jungle trekking, resting pavilions, hammock garden, camping sites and others to make use of the forest area incorporated in the development.
“We have put up all the necessary precautions, including slope protection measures at Damansara Foresta,” he said when asked as the property was located on a highland, some 180 metres above sea level.
Damansara Foresta is expected to be completed by end-2015.
By The Star
Naza TTDI bullish on KL property
KUALA LUMPUR: Naza TTDI Sdn Bhd, which is optimistic about the property market in Kuala Lumpur, will continue to launch new projects and residential components in its existing projects.
The property development arm of the Naza Group is also launching three high-end residential projects.
Deputy executive chairman and group managing director SM Faliq SM Nasimuddin said the company is still optimistic about the property market in Kuala Lumpur.
"So far, I think we are still going aggressive into 2012, we still continue launching our remaining phases in our current township projects and also our ongoing projects," he told a news conference after the awards ceremony for "Bertam Master Plan & Creative Ideas Competition" last night.
SM Faliq said the company will launch Platinum Park residences, residential component in Taman Tun Dr Ismail and one residential component in KL Metropolis.
The combined gross development value for these projects is about RM1.5 billion.
Earlier, Naza TTDI and Persatuan Arkitek Malaysia (PAM) awarded six participants of the jointly-organised competition.
The competition required participants to submit creative ideas and designs for the masterplan of Naza TTDI's upcoming 333.6ha township in Bertam, Penang.
SM Faliq said the Bertam project is the company's first township development outside the Klang Valley.
"The success of our Bertam township development will serve as a platform for us to foray into development in other parts of the country," he said.
SM Faliq said the competition, which is its third such collaboration with PAM, aims to provide a platform for the architectural fraternity to showcase their expertise.
He added that Naza TTDI is committed to supporting and giving due recognition to local architect firms for their creative and innovative designs.
Naza TTDI had previously collaborated with PAM for respective masterplan competitions for the former's land in Puchong and Shah Alam in 2010.
Among the judging criteria for the competition include innovativeness, environmental-friendly features, the ability to achieve the Green Building Index rating, economical and resource efficiency, world-class qualities and consideration of traffic circulation while conforming to local planning standards and guidelines.
Also present at the awards ceremony were PAM president Ar Saifuddin Ahmad and chief executive officer Ar Paul Lai Chu.
By Business Times
Naza TTDI expanding to Penang
KUALA LUMPUR: Naza TTDI Sdn Bhd will commence works on its first out-of-Klang Valley project in Bertam, Penang next year.
While the mixed development is still in its design stage, it will be Naza TTDI's long-term project geared towards the middle to high-end market.
Faliq: ‘This year is our trophy year.’
Deputy executive chairman and group managing director SM Faliq SM Nasimuddin said the gross development value had not been determined but gave a rough estimate of houses priced from RM600,000.
The 834-acre Bertam township will be mainly residential with commercial and education developments.
“Penang island is not getting any cheaper so people who want to stay there would have to look for alternatives,” Faliq said after the Bertam Master Plan & Creative Ideas Competition awards ceremony.
He said that Naza TTDI had plans to go south to the Iskandar Malaysia region as well as beyond the country.
While the property arm of Naza has been developing projects single-handedly, it is open collaborations and partnerships.
“There are local and foreign parties that have approached us but nothing is solid yet, we are still in talks,” Faliq said.
“This year is our trophy year. We are still aggressive and optimistic about the property market,” he added, “We are looking to launch three high-end projects this year.”
Faliq was referring to the Platinum Park, KL Metropolis and Taman Tun Dr Ismail residential projects in Kuala Lumpur. The combined GDV for these projects is RM1.5bil.
Naza TTDI has a total of 1,200 acres of landbank now, 800 acres of which are under planning.
The Bertam Master Plan competition was jointly-organised by Persatuan Arkitek Malaysia and Naza TTDI, where participants submitted ideas and designs for the master plan of the township.
Winners of the competition were architects Lim Siew Bok, David Teh Teik Lim and Almaz Salma Abdul Rahim who received RM100,000, RM75,000 and RM50,000 respectively.
By The Star
While the mixed development is still in its design stage, it will be Naza TTDI's long-term project geared towards the middle to high-end market.
Deputy executive chairman and group managing director SM Faliq SM Nasimuddin said the gross development value had not been determined but gave a rough estimate of houses priced from RM600,000.
The 834-acre Bertam township will be mainly residential with commercial and education developments.
“Penang island is not getting any cheaper so people who want to stay there would have to look for alternatives,” Faliq said after the Bertam Master Plan & Creative Ideas Competition awards ceremony.
He said that Naza TTDI had plans to go south to the Iskandar Malaysia region as well as beyond the country.
While the property arm of Naza has been developing projects single-handedly, it is open collaborations and partnerships.
“There are local and foreign parties that have approached us but nothing is solid yet, we are still in talks,” Faliq said.
“This year is our trophy year. We are still aggressive and optimistic about the property market,” he added, “We are looking to launch three high-end projects this year.”
Faliq was referring to the Platinum Park, KL Metropolis and Taman Tun Dr Ismail residential projects in Kuala Lumpur. The combined GDV for these projects is RM1.5bil.
Naza TTDI has a total of 1,200 acres of landbank now, 800 acres of which are under planning.
The Bertam Master Plan competition was jointly-organised by Persatuan Arkitek Malaysia and Naza TTDI, where participants submitted ideas and designs for the master plan of the township.
Winners of the competition were architects Lim Siew Bok, David Teh Teik Lim and Almaz Salma Abdul Rahim who received RM100,000, RM75,000 and RM50,000 respectively.
By The Star
IOI targets project at Singaporeans
KULAIJAYA: IOI Corp Bhd does not see any effect from the additional 10% stamp duty ruling imposed by the Singapore government on foreigners buying private property on its new project there.
IOI Properties Bhd senior general manager Simon Heng said the company was targeting Singaporean buyers instead of foreigners for its Clementi condominium project.
He said its strategic location within the mature housing estate of Clementi and close proximity with the National University Hospital and Clementi MRT station were the project's strong selling points.
“There are many Singaporeans living in the HDB flats who wanted to upgrade to living in private condominiums,” Heng told StarBiz after signing an agreement service with Telekom Malaysia Bhd to provide UniFi high-speed broadband network connectivity to house buyers of Parcels 3A and 4A of Bandar Putra here and Parcel 3A of Taman Kempas Utama in Johor Baru.
Singapore had in December introduced a new ruling where foreigners have to pay an additional 10% stamp duty when buying a private home in the republic, effectively raising the purchase price by 10%.
The move is seen to cool the private residential prices on the island state which are on the upward trend and there are complaints from Singaporeans that rich foreigners have push up demand and prices of private residential properties.
“We have yet to come out with the development details and land utilisation of 0.97ha site of the Clementi project,” said Heng adding transaction for high-end condominium in Clementi area could fetch S$1,000 per sq ft.
By The Star
IOI Properties Bhd senior general manager Simon Heng said the company was targeting Singaporean buyers instead of foreigners for its Clementi condominium project.
He said its strategic location within the mature housing estate of Clementi and close proximity with the National University Hospital and Clementi MRT station were the project's strong selling points.
“There are many Singaporeans living in the HDB flats who wanted to upgrade to living in private condominiums,” Heng told StarBiz after signing an agreement service with Telekom Malaysia Bhd to provide UniFi high-speed broadband network connectivity to house buyers of Parcels 3A and 4A of Bandar Putra here and Parcel 3A of Taman Kempas Utama in Johor Baru.
Singapore had in December introduced a new ruling where foreigners have to pay an additional 10% stamp duty when buying a private home in the republic, effectively raising the purchase price by 10%.
The move is seen to cool the private residential prices on the island state which are on the upward trend and there are complaints from Singaporeans that rich foreigners have push up demand and prices of private residential properties.
“We have yet to come out with the development details and land utilisation of 0.97ha site of the Clementi project,” said Heng adding transaction for high-end condominium in Clementi area could fetch S$1,000 per sq ft.
By The Star
Wednesday, January 18, 2012
Rising confidence in property mart: Napic
Some 400,000 transactions valued more than RM100 million were undertaken during the first three quarters of last year.
Zailan said the second quarter of 2011 was the most active period during the period with more than 115,000 transactions recorded.
Housing starts, a key economic indicator, refer to the number of residential building construction projects begun during a particular period.
Speaking at the 5th Malaysian Property Summit 2012, Zailan said residential property sub-sector expanded significantly by 23.2 per cent after recording a 8.8 per cent growth for similar period in 2010.
At a media briefing, summit chairman and real estate agency CH Williams Talhar and Wong (WTW) managing director Foo Gee Jen does not expect prices to soften within KL although the external uncertainties may have led property buyers to be more cautious.
Choy Yue Kwong, who is president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPs) said past crises have shown that although property prices may drop in cities like Kuala Lumpur and Petaling Jaya for a short period, prices also pick up as fast.
Zailan expects the vacant space in the retail and office sectors to be absorbed as more space taken up from the market as private investment spurred by the Economic Transformation Programme takes place.
He described the outlook for the 2012 property market as bright with strong demand as developers and investors capitalise on the government's incentives.
Demand for development land will also increase from the spillover effect of projects such as highways such as Ampang-Cheras-Pandan Elevated Highway, Guthrie-Daman-sara Expressway, Damansara-Petaling Jaya Highway, Pantai Barat-Banting-Taiping Highway, Sungai Dua-Juru Highway and Paroi-Senawang Highway.
By Business Times
TM eyes 20 HSBB deals with developers
Its executive vice-president (SME), Azizi A. Hadi, said last year, TM inked agreements with 11 property developers, mainly for projects in the Klang Valley.
"This year, we plan to expand our services in Penang, Sabah, Sarawak, Johor and obviously the Klang Valley region," he said after signing the agreement with BHL Group of Companies here yesterday.
This move, Azizi said, will increase HSBB coverage to some 95 areas nationwide from the current 78.
"To date, the premium HSBB is offered to 1.19 million premises and we expect to increase the figures to 1.3 million by year-end ," he said.
Azizi said TM will launch Unifi in Ipoh and continue to expand it in key areas nationwide.
The agreement with BHL was for the deployment and provision of HSBB network infrastructure and services to the latter's three projects.
The projects are USJ One Park in Subang Jaya, KL Palace Court in Jalan Klang Lama and a development in Cheras.
By Bernama
UDA seeks investors for proposed complex
JOHOR BARU: UDA Holdings Bhd is looking for investors to undertake a joint-venture project to develop the Angsana II commercial complex.
Chairman Datuk Nur Jazlan Mohamed said the complex, adjacent to its existing Plaza Angsana shopping complex in Jalan Tampoi, would cost between RM200mil and RM250mil.
“We are open to any proposal from interested parties regardless of whether they are local or foreign investors,'' he said yesterday.
Nur Jazlan: ‘We need to start changing our mindset.’
The proposed Angsana II commercial project would be the first shopping complex in Johor Baru to incorporate a street-mall concept, Nur Jazlan told reporters after attending the corporate social responsibility programme at the home for the handicapped in Taman Sinar Harapan Tampoi, in conjunction with the company's 40th anniversary.
He said the company would not limit itself to working only with a domestic partner or investor in the project and was more than willing to work with a foreign investor.
Nur Jazlan said that certain parties including politicians should not politicise the decision made by the company to cooperate with foreign partners in its property development projects.
He said as a government-linked company (GLC), UDA's duty was to ensure that it was able to bring benefits to all Malaysians and not to a certain race only.
“We need to start changing our mindset. The country will not be able to move forward if we continue to use race-centric issues in business activities,'' added Nur Jazlan.
The company hoped to start Angsana II project this year if it was able to find a right partner for the project and “did not want to miss the boat again,” he said.
Nur Jazlan was referring to the directive made by the Finance Ministry (MoF) to UDA to review its decision on a proposed joint-venture project with China's GLC Everbright International Construction Engineering Corp.
He said a steering committee had already started reviewing the proposal made by the MoF to develop the former Pudu Jail site, better known as the Bukit Bintang City Centre.
“The committee will see whether the MoF's proposal is viable compared with the model proposed by Everbright and it (the study) will probably take months,'' said Nur Jazlan.
On an unrelated matter, he said UDA would spent RM15mil this year to renovate its 15-year-old Plaza Angsana shopping complex, including upgrading its faade and food court.
By The Star
Chairman Datuk Nur Jazlan Mohamed said the complex, adjacent to its existing Plaza Angsana shopping complex in Jalan Tampoi, would cost between RM200mil and RM250mil.
“We are open to any proposal from interested parties regardless of whether they are local or foreign investors,'' he said yesterday.
The proposed Angsana II commercial project would be the first shopping complex in Johor Baru to incorporate a street-mall concept, Nur Jazlan told reporters after attending the corporate social responsibility programme at the home for the handicapped in Taman Sinar Harapan Tampoi, in conjunction with the company's 40th anniversary.
He said the company would not limit itself to working only with a domestic partner or investor in the project and was more than willing to work with a foreign investor.
Nur Jazlan said that certain parties including politicians should not politicise the decision made by the company to cooperate with foreign partners in its property development projects.
He said as a government-linked company (GLC), UDA's duty was to ensure that it was able to bring benefits to all Malaysians and not to a certain race only.
“We need to start changing our mindset. The country will not be able to move forward if we continue to use race-centric issues in business activities,'' added Nur Jazlan.
The company hoped to start Angsana II project this year if it was able to find a right partner for the project and “did not want to miss the boat again,” he said.
Nur Jazlan was referring to the directive made by the Finance Ministry (MoF) to UDA to review its decision on a proposed joint-venture project with China's GLC Everbright International Construction Engineering Corp.
He said a steering committee had already started reviewing the proposal made by the MoF to develop the former Pudu Jail site, better known as the Bukit Bintang City Centre.
“The committee will see whether the MoF's proposal is viable compared with the model proposed by Everbright and it (the study) will probably take months,'' said Nur Jazlan.
On an unrelated matter, he said UDA would spent RM15mil this year to renovate its 15-year-old Plaza Angsana shopping complex, including upgrading its faade and food court.
By The Star
IOI advances on Singapore land buy
IOI Corporation Bhd rose one sen or 0.19 per cent to RM5.34 as at 11.20am today as market players are bullish on its property business.
IOI announced yesterday its 99.8 per cent-owned indirect subsidiary Multi Wealth (Singapore) Ltd has won a bid for a parcel of land in the island republic for S$408 million (RM995.5 million).
Measuring about 24,417.6 sq metres (2.4ha), the land, in Jalan Lempeng, Clementi Avenue 6, is intended for condominium development.
HwangDBS Vickers Research said it was neutral on the deal as the aggregate impact over five years would be less than 10 per cent of IOI's forecast pre-tax profits (approximately RM2.8 to RM3.4 billion per annum).
"We believe the estimated S$709 million (approximately RM1,730 million) total investment cost is better spent on its higher-margin plantation operations," it said in a research note today.
The research house maintains a "hold" rating on IOI.
By Bernama
IOI announced yesterday its 99.8 per cent-owned indirect subsidiary Multi Wealth (Singapore) Ltd has won a bid for a parcel of land in the island republic for S$408 million (RM995.5 million).
Measuring about 24,417.6 sq metres (2.4ha), the land, in Jalan Lempeng, Clementi Avenue 6, is intended for condominium development.
HwangDBS Vickers Research said it was neutral on the deal as the aggregate impact over five years would be less than 10 per cent of IOI's forecast pre-tax profits (approximately RM2.8 to RM3.4 billion per annum).
"We believe the estimated S$709 million (approximately RM1,730 million) total investment cost is better spent on its higher-margin plantation operations," it said in a research note today.
The research house maintains a "hold" rating on IOI.
By Bernama
IOI Corp wins bid for S’pore condo land
KUALA LUMPUR: IOI Corp Bhd has won a bid for a parcel of land in Singapore for S$408mil (RM995.5mil) that would enable the company to be involved in mass property market in the island-state.
IOI Corp said its 99.8% indirect subsidiary Multi Wealth (S) Ltd had been notified by the Housing and Development Board of Singapore of its acceptance of Multi Wealth’s bid for the land measuring about 24,417.6 sq m at Jalan Lempeng.
“The land, which is a rare condominium site, is located in the mature housing estate of Clementi and will have a good potential to tap into a large catchment of upgraders from the existing residents living in the area,” it told Bursa Malaysia.
This win confirmed StarBiz report yesterday that IOI Corp would be a potential winner as it was the highest bidder.
CIMB Research said the win was a slight surprise as it did not expect the group to venture into another Singapore property venture so soon after its recent purchase of the South Beach project.
“The Clementi condo project is strategically located and should attract pent-up demand from residents around the area.”
But CIMB Research is cautious on the Singapore property market, given the recent hike in stamp duties.
By The Star
IOI Corp said its 99.8% indirect subsidiary Multi Wealth (S) Ltd had been notified by the Housing and Development Board of Singapore of its acceptance of Multi Wealth’s bid for the land measuring about 24,417.6 sq m at Jalan Lempeng.
“The land, which is a rare condominium site, is located in the mature housing estate of Clementi and will have a good potential to tap into a large catchment of upgraders from the existing residents living in the area,” it told Bursa Malaysia.
This win confirmed StarBiz report yesterday that IOI Corp would be a potential winner as it was the highest bidder.
CIMB Research said the win was a slight surprise as it did not expect the group to venture into another Singapore property venture so soon after its recent purchase of the South Beach project.
“The Clementi condo project is strategically located and should attract pent-up demand from residents around the area.”
But CIMB Research is cautious on the Singapore property market, given the recent hike in stamp duties.
By The Star
China's property market slows down
SHANGHAI: China's property market slowed last year, official figures showed yesterday, as the government sought to bring down runaway housing prices amid fears of a speculative bubble.
The country introduced a range of measures aimed at curbing the real estate market last year, such as bans on buying second homes in some cities, hiking minimum down-payments and introducing property taxes.
Overall property investment rose an annual 27.9 per cent to 6.17 trillion yuan (RM3 trillion) in 2011, slowing from growth of 33.2 per cent in 2010, the National Bureau of Statistics said.
Meanwhile, housing sales - excluding government subsidised homes - rose 12.1 per cent to 5.91 trillion yuan last year, marking a slowdown from 18.9 per cent growth in 2010.
"Our major progress is that speculative-based investment in the property market has been curbed," statistics bureau chief Ma Jiantang told a news conference in Beijing.
Analysts have warned the correction in the property market is threatening to drag on economic growth this year, despite government resolve to keep control measures firmly in place.
Alistair Thornton of IHS Global Insight in Beijing said the rapid slowdown in property investment in the final month of last year indicated the overall economy was undergoing an "aggressive" slowdown.
"In this light, the property market correction is providing the greatest downside momentum," he said.
At the same time, China has pledged to invest more than $700 billion in low-cost housing to help those priced out of the market, with plans to build or renovate 36 million homes over the next five years.
Property developers are hoping Beijing will ease control measures this year, though analysts are divided on the timing of such a move.
In Shanghai, among China's most vibrant property markets, city mayor Han Zheng has dashed hopes of an immediate relaxation.
"This year, the strength of the property market control measures will not be reduced and the policy will not change," he told a news conference on Monday.
Home prices in most major Chinese cities dropped in November last year from the previous month with 49 of the 70 Chinese cities tracked by the government reporting falls.
By AFP
The country introduced a range of measures aimed at curbing the real estate market last year, such as bans on buying second homes in some cities, hiking minimum down-payments and introducing property taxes.
Overall property investment rose an annual 27.9 per cent to 6.17 trillion yuan (RM3 trillion) in 2011, slowing from growth of 33.2 per cent in 2010, the National Bureau of Statistics said.
Meanwhile, housing sales - excluding government subsidised homes - rose 12.1 per cent to 5.91 trillion yuan last year, marking a slowdown from 18.9 per cent growth in 2010.
"Our major progress is that speculative-based investment in the property market has been curbed," statistics bureau chief Ma Jiantang told a news conference in Beijing.
Analysts have warned the correction in the property market is threatening to drag on economic growth this year, despite government resolve to keep control measures firmly in place.
Alistair Thornton of IHS Global Insight in Beijing said the rapid slowdown in property investment in the final month of last year indicated the overall economy was undergoing an "aggressive" slowdown.
"In this light, the property market correction is providing the greatest downside momentum," he said.
At the same time, China has pledged to invest more than $700 billion in low-cost housing to help those priced out of the market, with plans to build or renovate 36 million homes over the next five years.
Property developers are hoping Beijing will ease control measures this year, though analysts are divided on the timing of such a move.
In Shanghai, among China's most vibrant property markets, city mayor Han Zheng has dashed hopes of an immediate relaxation.
"This year, the strength of the property market control measures will not be reduced and the policy will not change," he told a news conference on Monday.
Home prices in most major Chinese cities dropped in November last year from the previous month with 49 of the 70 Chinese cities tracked by the government reporting falls.
By AFP
Australian REITs seen outperforming
SYDNEY: Australian property trusts are likely to deliver a total return of 12 to 15 per cent this year, outperforming local equities and other Asia-Pacific property markets, analysts said.
Australian REITs have proved resilient last year, slipping seven per cent against a decline of 14.5 per cent in the broader S&P/ASX 200 index.
In comparison, Singapore's FT ST Real Estate Investment Trusts Index dropped 16 per cent, while Hong Kong's property sub-index has declined 24 per cent.
Simon Garing, analyst at Bank of America Merrill Lynch, said Singapore property stocks faced a slowdown after the government rolled out measures to cool the residential market.
"We expect Asian REITs will continue to underperform for the first half of the calender year," he said.
"Australian REITs have been sort of a safe haven," he added.
Morgan Stanley is also expecting Australian REITs to perform better than the broad market as investors look for defensive plays and focus more on income rather than capital gains.
By Reuters
Australian REITs have proved resilient last year, slipping seven per cent against a decline of 14.5 per cent in the broader S&P/ASX 200 index.
In comparison, Singapore's FT ST Real Estate Investment Trusts Index dropped 16 per cent, while Hong Kong's property sub-index has declined 24 per cent.
Simon Garing, analyst at Bank of America Merrill Lynch, said Singapore property stocks faced a slowdown after the government rolled out measures to cool the residential market.
"We expect Asian REITs will continue to underperform for the first half of the calender year," he said.
"Australian REITs have been sort of a safe haven," he added.
Morgan Stanley is also expecting Australian REITs to perform better than the broad market as investors look for defensive plays and focus more on income rather than capital gains.
By Reuters
Tuesday, January 17, 2012
SP Setia eyes move into Vietnam city centres
SP Setia Bhd, Malaysia’s second-biggest publicly traded developer, hopes to take advantage of lower prices in Vietnam’s property market by starting a development in downtown Ho Chi Minh City or Hanoi.
Setia’s first two projects in Vietnam are housing developments in Binh Duong province, adjacent to Ho Chi Minh City, the country’s business center. The developer is now looking for a “high-rise building with some branding” to boost its corporate image in Vietnam.
Vietnam’s property prices are falling amid a glut of high-end residential apartment developments, the U.K.-listed Vietnam Property Fund Ltd said last month. Asking prices have dropped over the past “six, seven weeks,” said Alex Loh, Setia’s chief resident representative in Vietnam.
“We are looking for opportunistic deals,” Loh said in an interview yesterday in his Ho Chi Minh City office, declining to give details on any potential projects or prices. “We have been trying for the last few weeks and months. We are looking at coming back closer to the city now.”
Vietnam marked SP Setia’s first move outside its home base and the company has now also expanded into Australia. Chief Executive Officer Liew Kee Sin said in 2008 that the Kuala Lumpur-based company planned to spend “a lot of effort and time” in developing its projects in Vietnam.
Sales in the country have been slow, hurt by commercial bank lending rates of “about 18 or 19 percent,” Loh said, as the Vietnamese central bank pushed up its policy rates to slow Asia’s fastest inflation.
“They’re not very happy with it,” Loh said about his company’s view on Vietnam five years after committing to its first project in the country. “The pace here is just not there. But head office understands it, so they’re still going along with a slower pace-type of sales over here.”
SP Setia expects to identify a downtown project in Vietnam by the second quarter, and be at the “negotiations stage” by that time, he said.
By Bloomberg
Setia’s first two projects in Vietnam are housing developments in Binh Duong province, adjacent to Ho Chi Minh City, the country’s business center. The developer is now looking for a “high-rise building with some branding” to boost its corporate image in Vietnam.
Vietnam’s property prices are falling amid a glut of high-end residential apartment developments, the U.K.-listed Vietnam Property Fund Ltd said last month. Asking prices have dropped over the past “six, seven weeks,” said Alex Loh, Setia’s chief resident representative in Vietnam.
“We are looking for opportunistic deals,” Loh said in an interview yesterday in his Ho Chi Minh City office, declining to give details on any potential projects or prices. “We have been trying for the last few weeks and months. We are looking at coming back closer to the city now.”
Vietnam marked SP Setia’s first move outside its home base and the company has now also expanded into Australia. Chief Executive Officer Liew Kee Sin said in 2008 that the Kuala Lumpur-based company planned to spend “a lot of effort and time” in developing its projects in Vietnam.
Sales in the country have been slow, hurt by commercial bank lending rates of “about 18 or 19 percent,” Loh said, as the Vietnamese central bank pushed up its policy rates to slow Asia’s fastest inflation.
“They’re not very happy with it,” Loh said about his company’s view on Vietnam five years after committing to its first project in the country. “The pace here is just not there. But head office understands it, so they’re still going along with a slower pace-type of sales over here.”
SP Setia expects to identify a downtown project in Vietnam by the second quarter, and be at the “negotiations stage” by that time, he said.
By Bloomberg
Work on KB Sentral project to take off in June
KOTA BARU: Construction and engineering firm Sara-Timur Sdn Bhd plans to invest up to RM600 million to develop an integrated commercial property project called Kota Baru Sentral@Tunjong in Kelantan.
Chairman emeritus professor Datuk Dr M. Zawawi Ismail said the project, which will feature shopping malls, luxury apartments and condominiums, a convention centre and office blocks, will be developed over three phases on a 16.5ha land in Tunjong.
"We expect to begin construction by June or July as land acquisition procedures and other preliminary engineering works are already completed," he told reporters here.
The project, Zawawi said, will be jointly developed with the Kelantan Menteri Besar Incorporated and Tunjong Development Corporation.
He said the first phase of the project involving a shopping centre called "village mall" is expected to be ready for occupation in two anda half years.
"We expect the entire project to be fully ready in five to seven years from now," Zawawi said.
He said Kelantan traditional architecture and contemporary Islamic designs will be infused into buildings in the project.
By Business Times
Chairman emeritus professor Datuk Dr M. Zawawi Ismail said the project, which will feature shopping malls, luxury apartments and condominiums, a convention centre and office blocks, will be developed over three phases on a 16.5ha land in Tunjong.
"We expect to begin construction by June or July as land acquisition procedures and other preliminary engineering works are already completed," he told reporters here.
The project, Zawawi said, will be jointly developed with the Kelantan Menteri Besar Incorporated and Tunjong Development Corporation.
He said the first phase of the project involving a shopping centre called "village mall" is expected to be ready for occupation in two anda half years.
"We expect the entire project to be fully ready in five to seven years from now," Zawawi said.
He said Kelantan traditional architecture and contemporary Islamic designs will be infused into buildings in the project.
By Business Times
Iskandar set to reach tipping point
PETALING JAYA: Iskandar Malaysia is set to reach its tipping point in the next 24 months after the completion of key catalyst developments and infrastructure improvements, according to HwangDBS Vickers Research.
The research unit believed that prospects for the economic growth corridor in Johor would be boosted by the successful bilateral talks during the recent Malaysia-Singapore Leaders' Retreat, the entry of more property developers as well as spillover demand for properties in Iskandar due to Singapore's latest stamp duty hike and high property prices.
It was noted that the recent bilateral talks had resulted in fruitful discussions on topics such as the construction of an undersea tunnel linking Johor Baru and Singapore, sale of electricity to Singapore (possibly from Pengerang), co-operation in aviation and airport services between Johor's Senai International Airport and Singapore's Changi International Airport, and the formation of a work group on industrial co-operation to promote Iskandar and Singapore.
“The industrial co-operation work group may be a springboard for more investments by Singapore in Iskandar, and could be a key re-rating catalyst,” HwangDBS Vickers Research said.
Since 2006, Iskandar has received RM77.8bil worth of committed investments.
The region had also recently seen property launches setting new price benchmarks, the research house said.
“We were pleasantly surprised by the strong 65% bookings for UEM Land Holdings Bhd's Imperia@Puteri Harbour condominiums, which were launched in Nov 2011 at a record RM725 per sq ft.”
It was also noted that UEM Land's Impiana@East Ledang condominiums had seen brisk sales with two blocks almost fully sold within six months at RM480 per sq ft (compared with RM300 per sq ft for the adjacent Ujana apartments launched in 2009).
For SP Setia Bhd, Johor is also a core market (accounting for 29% of its sales) with sales surging 57% in its financial year ended Oct 31, 2011.
Meanwhile, land values in Johor's Southern Industrial and Logistics Clusters continued to appreciate with the latest transactions hitting RM35 per sq ft (compared with 2010's RM25 per sq ft).
HwangDBS Vickers Research said its top stock picks, for exposure to Iskandar, were UEM Land, SP Setia, Eastern & Oriental Bhd and Genting Plantations Bhd.
By The Star
The research unit believed that prospects for the economic growth corridor in Johor would be boosted by the successful bilateral talks during the recent Malaysia-Singapore Leaders' Retreat, the entry of more property developers as well as spillover demand for properties in Iskandar due to Singapore's latest stamp duty hike and high property prices.
It was noted that the recent bilateral talks had resulted in fruitful discussions on topics such as the construction of an undersea tunnel linking Johor Baru and Singapore, sale of electricity to Singapore (possibly from Pengerang), co-operation in aviation and airport services between Johor's Senai International Airport and Singapore's Changi International Airport, and the formation of a work group on industrial co-operation to promote Iskandar and Singapore.
“The industrial co-operation work group may be a springboard for more investments by Singapore in Iskandar, and could be a key re-rating catalyst,” HwangDBS Vickers Research said.
Since 2006, Iskandar has received RM77.8bil worth of committed investments.
The region had also recently seen property launches setting new price benchmarks, the research house said.
“We were pleasantly surprised by the strong 65% bookings for UEM Land Holdings Bhd's Imperia@Puteri Harbour condominiums, which were launched in Nov 2011 at a record RM725 per sq ft.”
It was also noted that UEM Land's Impiana@East Ledang condominiums had seen brisk sales with two blocks almost fully sold within six months at RM480 per sq ft (compared with RM300 per sq ft for the adjacent Ujana apartments launched in 2009).
For SP Setia Bhd, Johor is also a core market (accounting for 29% of its sales) with sales surging 57% in its financial year ended Oct 31, 2011.
Meanwhile, land values in Johor's Southern Industrial and Logistics Clusters continued to appreciate with the latest transactions hitting RM35 per sq ft (compared with 2010's RM25 per sq ft).
HwangDBS Vickers Research said its top stock picks, for exposure to Iskandar, were UEM Land, SP Setia, Eastern & Oriental Bhd and Genting Plantations Bhd.
By The Star
UDA to spend RM15m on Plaza Angsana
UDA Holdings Bhd will spend RM15 million to give Plaza Angsana, a popular shopping complex here, a facelift.
Chairman Datuk Nur Jazlan Mohamed said the project would be undertaken in two stages with the first involving external renovation works costing RM8 million.
Another RM7 million would be spent in the second phase, focusing on replacing the lights and floors as well upgrading the food court, he said.
"Tender for the first phase will open in two or three weeks and we expect the uprading work at Plaza Angsana to take a year to complete," he told reporters when attending the company's community programme at Taman Sinar Harapan here today.
Nur Jazlan said other shopping malls of the same age as Plaza Angsana had undergone upgrading works and UDA Holdings had to do the same so that Plaza Angsana could remain competitive.
The company was also looking for investors for the Angsana 2 project which would be developed at the parking lot next to Plaza Angsana, he said.
The project was expected to cost between RM200 million and RM250 million, he said.
By Bernama
Chairman Datuk Nur Jazlan Mohamed said the project would be undertaken in two stages with the first involving external renovation works costing RM8 million.
Another RM7 million would be spent in the second phase, focusing on replacing the lights and floors as well upgrading the food court, he said.
"Tender for the first phase will open in two or three weeks and we expect the uprading work at Plaza Angsana to take a year to complete," he told reporters when attending the company's community programme at Taman Sinar Harapan here today.
Nur Jazlan said other shopping malls of the same age as Plaza Angsana had undergone upgrading works and UDA Holdings had to do the same so that Plaza Angsana could remain competitive.
The company was also looking for investors for the Angsana 2 project which would be developed at the parking lot next to Plaza Angsana, he said.
The project was expected to cost between RM200 million and RM250 million, he said.
By Bernama
TM eyes HSBB service pacts with 20 property developers
KUALA LUMPUR: Telekom Malaysia Bhd (TM) aims to sign service agreements with 20 property developers this year to deploy and provide its high-speed broadband service (HSBB) at their respective projects.
Its executive vice president (SME), Azizi A. Hadi, said last year, TM inked agreements with 11 property developers, mainly for projects in the Klang Valley.
"This year, we plan to expand our services in Penang, Sabah, Sarawak, Johor and obviously the Klang Valley region," he told reporters after signing the agreement with BHL Group of Companies here today.
This move, Azizi said, would increase HSBB coverage to some 95 areas nationwide from the current 78. "To-date, the premium HSBB is offered to 1.19 million premises and we expect to increase to 1.3 million premises by year-end.
"Currently, our take-up rate is around 20 per cent.
"As our service offering expands, I am sure the rate also will increase in tandem with the growing Unifi subscribers," he said.
Azizi said TM would launch its high-speed broadband services, Unifi, in Ipoh and later continue to expand in key areas nationwide.
The agreement with BHL was for the deployment and provision of HSBB network infrastructure and services to the latter's three projects.
The projects are USJ One Park in Subang Jaya, KL Palace Court in Jalan Klang Lama and another in Cheras, which account for a total gross development value of RM680 million.
By Bernama
Gurney Paragon set to welcome RM35m F&B investments
GEORGE TOWN: Penang is set to welcome investments totalling RM35 million this year from food and beverage operators into phase one of the Gurney Paragon development on Gurney Drive.
The project's developer, Hunza Properties Bhd (HPB), has already seen the entry of nine tenants into Phase 1B of its multi-billion ringgit waterfront development with capital investments in excess of RM10 million.
"We are working hard to continue bringing in established names which have yet to set up a presence in Penang to open their businesses in Gurney Paragon," HPB executive chairman Datuk Khor Teng Tong told Business Times yesterday.
Phase 1B of the project comprises some 100,000 sq ft of lettable space, and its developers are touting the entire Gurney Paragon project as the only one in the country for now which integrates a restored heritage building amidst modern residential, retail and commercial spaces.
The company last night officially opened its "St Jo's@Gurney Paragon" building, which is the restored heritage building built in 1918.
The building is flanked by two towers which house 220 high-end dwellings, along with eateries on its first three levels.
St Jo's, which was formerly known as St Joseph's Novitiate, was initially started by the De La Salle Brothers to train young Catholic men to enter the religious order.
The colonial building, which was restored by HPB for RM10 million, was also once the site for Uplands School now known as the International School of Penang.
The restoration works include retaining the building's teakwood floors, roof trusses, window frames, stairways and clay tiles.
Khor said the current tenants surrounding St Jo's are Goku Roku Ramen, Pacific Coffee Co, T.G.I.Friday's, Brussels Beer Cafe, The Coffee Bean and Tea Leaf, and Meet Fresh.
The tenants who will open soon for business, he added, are Italiannies (serving Italian cuisine), Wong Kok Char Chan Teng (Hong Kong's foods and treats eatery), Share Tea (Taiwanese bubble tea beverage) and Petite Millie (casual French cuisine).
Khor said HPB is expecting at least 30 per cent of its new tenants to be first-time investors in Penang where a lifestyle mall - the Gurney Paragon Mall - is due to be completed by the end of this year.
By Business Times (by Marina Emmanuel)
"We are working hard to continue bringing in established names which have yet to set up a presence in Penang to open their businesses in Gurney Paragon," HPB executive chairman Datuk Khor Teng Tong told Business Times yesterday.
Phase 1B of the project comprises some 100,000 sq ft of lettable space, and its developers are touting the entire Gurney Paragon project as the only one in the country for now which integrates a restored heritage building amidst modern residential, retail and commercial spaces.
The company last night officially opened its "St Jo's@Gurney Paragon" building, which is the restored heritage building built in 1918.
The building is flanked by two towers which house 220 high-end dwellings, along with eateries on its first three levels.
St Jo's, which was formerly known as St Joseph's Novitiate, was initially started by the De La Salle Brothers to train young Catholic men to enter the religious order.
The colonial building, which was restored by HPB for RM10 million, was also once the site for Uplands School now known as the International School of Penang.
The restoration works include retaining the building's teakwood floors, roof trusses, window frames, stairways and clay tiles.
Khor said the current tenants surrounding St Jo's are Goku Roku Ramen, Pacific Coffee Co, T.G.I.Friday's, Brussels Beer Cafe, The Coffee Bean and Tea Leaf, and Meet Fresh.
The tenants who will open soon for business, he added, are Italiannies (serving Italian cuisine), Wong Kok Char Chan Teng (Hong Kong's foods and treats eatery), Share Tea (Taiwanese bubble tea beverage) and Petite Millie (casual French cuisine).
Khor said HPB is expecting at least 30 per cent of its new tenants to be first-time investors in Penang where a lifestyle mall - the Gurney Paragon Mall - is due to be completed by the end of this year.
By Business Times (by Marina Emmanuel)
Monday, January 16, 2012
Volatile year for real estate investment trusts
PETALING JAYA: Headwinds from the gloomy global economic and financial fronts, particularly in the United States and the eurozone, will pose challenges to the performance of the local real estate investment trusts (M-REITs) this year.
According to Malaysian REIT Managers Association chairman Stewart Labrooy, the M-REIT sector will face slower growth and competition for tenants as an oversupply situation emerges in the office market leading to lower rental yields.
“It is going to be a volatile year ahead with the eurozone uncertainty coupled with low growth in the European and US markets. These markets are very important to growth in Asia and the impact would be felt in all export-led countries. Capital market activity will remain muted worldwide in 2012,” Labrooy told StarBiz.
In Kuala Lumpur, property prices are expected to remain flat for 2012 with some weaknesses in the high-end residential and office markets.
In the office sector, the seven million sq ft of new office space scheduled for completion this year would result in softening in rental and occupancy.
Despite the gloomy outlook, Labrooy said the Malaysian capital markets were expected to remain healthy this year with a significant number of deals notably the listing of Felda's assets in the first half of 2012.
“We are fully aware of the issues involved as some of the M-REITs have been through the 2008 global financial crisis and are taking a pro-active stand to retain their tenants through this period and manage their gearing leverage conservatively.
“Most M-REITs have strong tenant covenants and long leases to counter cyclical financial events. They also practise very conservative valuations so we don't see any downward pressure on them in 2012 and beyond.
In addition, the average gearing of most M-REITs are in the range of 20% to 40%, precluding any event of a default on their loan covenants,” he said.
Labrooy said a silver lining from the uncertainty and volatility of the global markets was that investors and fund managers had started shifting to dividend stocks with strong asset backing and renewed their interest in M-REITs as defensive stocks in uncertain times.
“I believe that we will continue to see a strong subscription in the M-REIT sector this year bearing in mind that the sector performed fairly well to outperform the KLCI in 2011,” he added.
He said the local market still faced liquidity problem as the size of M-REITs was still small by international standards with only five having market capitalisation of over RM1bil. This has contributed to the weak participation among retail investors.
Although the combined market capitalisation of M-REITs has climbed to over RM15bil, its market capitalisation is still way behind that of Singapore which has US$27bil in market capitalisation.
Labrooy, who is also the chief executive officer of Axis REIT Managers Bhd, said the recent listing of Sunway, CapitaMalls Malaysia Trust and Pavilion REITs had improved the liquidity of the domestic market.
Labrooy also said there was an absence of listing of foreign assets as REITs on the local bourse, adding that those who wanted to go for listing had opted to do so in Singapore due to its much higher liquidity and better tax structure. The local regulatory and tax framework must be improved to be on par with Singapore, and a comparable tax code would assist in getting greater retail participation.
On whether there was a scope for other types of REITs to come into the market, Labrooy said: “Malaysia probably has one of the most diversified REIT offerings in Asia. We are currently offering hospitals, plantations, office, retail, education, hospitality, industrial and diversified REITs.
“In addition three are syariah-compliant to cater to the Islamic investors.
“The sectors that will see growth are in industrial, medium cost housing, healthcare, education and tourism. These growth areas are in the Iskandar Malaysia in Johor, Greater Kuala Lumpur and Penang.”
Al-Hadharah Boustead REIT chairman Tan Sri Lodin Wok Kamaruddin concurred that the prospects for the REIT market has not been fully tapped in terms of awareness among potential investors.
He said M-REITs were viewed as a safer investment compared with other REITs in the region. This was due to the domestic-centric focus of their property investments, lower refinancing risks and relatively lower foreign shareholding.
“Malaysia is in a strong position for greater growth and has the potential to lead the REITs market in Asia given its good track record and stable market conditions in Malaysia.
“Generally, potential investors are not well informed about REITs. We believe the level of awareness can be increased nationwide as knowledge plays an important role,” he said.
Lodin pointed out.
On the types of M-REITs, he said: “It would be good if the market could diversify to different types of REITs. Malaysia has a lot of property related assets with the potential of being “REITed”. The only factor at play right now is time. Once the conditions are favourable, industry specialists should develop these assets into REITs.”
By The Star
Genting beats the odds
An analyst says it is well-positioned to build its RM11bil casino and hotel complex in Florida
The odds have turned to Genting Malaysia Bhd's favour to build a US$3.8bil (RM11.4bil) casino and hotel complex in Florida after a state Senate committee voted to allow the proposal to be debated by the state's lawmakers, analysts said.
The bill would deliberate on the issue of liberalising non-native American casinos. While the outcome would only be known in a few months, analysts say the move indicated that people supported the idea of legalised gambling to generate revenue for the economy.
The decision was positive for Genting as Florida may have as many as three Las Vegas-style casinos, with dealers and table games in addition to slot machines.
Currently in Florida, state laws only allowed casino gambling to resorts operated by native American tribes and slot machines at horse and dog race tracks.
“Genting would be well-positioned to secure the casino licence as it was the first to detail out its plans last year before any development has taken place,” said Alliance gaming analyst Cheah King Yoong.
“It's still early days and we still don't know the outcome. However, it's definitely good news for Genting. It has quite an ambitious plan in Miami,” said a gaming analyst from Kenanga Research.
Competition is hot too, as analysts say MGM Resorts International, Las Vegas Sands and Wynn Resorts Ltd are also interested in setting up casinos there.
Genting has submitted a master plan which showcased hotels, convention and entertainment centres, restaurants, retail and commercial facilities and residential towers on a waterfront site.
It is widely known that the measure is currently opposed by Walt Disney Co, the world's biggest theme-park company, whose flagship Walt Disney World is near Orlando, just over 300km away.
Another gaming analyst added that Genting may have won the battle, but it could be losing the war.
“The bill has not been finalised. What if they allowed a lot more casinos to set up shop? So although Genting gets the licence, it might still start off at a disadvantage,” said the gaming analyst.
“Furthermore, with Phase 2 of Genting New York venture coming up and estimated at a cost of more than US$4bil (RM12bil), should Genting be awarded the casino in Miami, how is it going to fund it?” asked the analyst.
Last week, it was announced that Genting had entered into a non-binding letter of intent with the New York State Urban Development Corp to consider developing an integrated complex next to its existing facility, Resorts World New York (RWNY) in Queens.
The new extension includes a convention and exhibition centre, up to 3,000 hotel rooms and an expansion of RWNY's casino. A binding MoU is expected to be inked by Nov 30.
“The timing of the developments will be important. Funding for both the developments in New York and Miami concurrently would mean spending close to US$8bil (RM24bil). I am sure Genting will work its way around that.
“However, investors are used with Genting being in net cash position. If debt levels were to rise to above 50%, then that would be something to ponder on,” said the gaming analyst.
Meanwhile, Cheah said the Greater Miami Chamber of Commerce's move to endorse casino resorts in South Florida was a huge plus point in helping to broaden the state's gambling laws.
“The endorsement by the largest business group in South Florida shows that the major business leaders understand the importance of having more income generation streams to boost the sluggish economy in the US. As such, odds are turning favourable to Genting 's Miami venture,” said Cheah.
Cheah believes that the market has not priced in the potential of Genting benefiting from the liberalisation of the gaming sector in Miami and the emergence of Genting as a global gaming giant.
The gaming analyst said that it was still early to talk about earnings potential should Genting be awarded the casino licence as this would be the first time a full-fledged casino was being constructed.
However, HwangDBS analyst Yee Mei Hui said that Resorts World New York was expected to contribute 16% to Genting Malaysia's 2012 earnings. She is estimating Genting to make RM1.75bil in net profit in 2012.
For the nine months to Sept 30, 2011, its net profit was up 17.95% to RM1.08bil while revenue was up 63.26% to RM6.16bil.
Genting gets some 90% of its revenues from its mainstay travel and leisure business in the Genting Highland Resorts.
By The Star
Sentoria to increase accommodation capacity in Bukit Gambang Resort
KUALA LUMPUR: Sentoria Group Bhd is set to increase its accommodation capacity in Bukit Gambang Resort City (BGRC) by the third quarter of 2012.
Sitting on a 547-acre land, BGRC is one of the largest integrated resort cities in Malaysia featuring multiple attractions in a single location, including the popular Bukit Gambang Water Park and Active Academy, as well as meetings, incentives, conventions and exhibitions facilities and accommodation.
In a statement today, Sentoria said at present, BGRC had 998 accommodation rooms in its Caribbean Bay Resort.
"The group is currently developing Arabian Bay Resort which would increase its room capacity to 1,864 rooms in total.
"Arabian Bay Resort has an estimated gross development value (GDV) of RM92 million and is targeted for completion by September 2012," Head of Public and Investor Relations Nasiruddin Nasrun said.
He said barely two years after opening its doors to the public in mid-2009, Bukit Gambang Water Park saw an increasing number of visitors, currently recording more than one million visitors over the past two years.
Sentoria is slated for listing on Bursa Malaysia in the first quarter of 2012.
By Bernama
Sitting on a 547-acre land, BGRC is one of the largest integrated resort cities in Malaysia featuring multiple attractions in a single location, including the popular Bukit Gambang Water Park and Active Academy, as well as meetings, incentives, conventions and exhibitions facilities and accommodation.
In a statement today, Sentoria said at present, BGRC had 998 accommodation rooms in its Caribbean Bay Resort.
"The group is currently developing Arabian Bay Resort which would increase its room capacity to 1,864 rooms in total.
"Arabian Bay Resort has an estimated gross development value (GDV) of RM92 million and is targeted for completion by September 2012," Head of Public and Investor Relations Nasiruddin Nasrun said.
He said barely two years after opening its doors to the public in mid-2009, Bukit Gambang Water Park saw an increasing number of visitors, currently recording more than one million visitors over the past two years.
Sentoria is slated for listing on Bursa Malaysia in the first quarter of 2012.
By Bernama
Johor Corp to upgrade hotels for RM40m
JOHOR state investment company Johor Corp will spend up to RM40 million to upgrade all its hotel assets to cater to the expected increase in tourist arrivals, which is driven by the opening of several attractions in Iskandar Malaysia.
By end of this year, the RM350 million indoor theme park in Puteri Harbour, which is developed by government investment arm Khazanah Nasional Bhd, will open its doors.
In Nusajaya, Legoland Malaysia, which is being built at a cost of around RM750 million, is expected to open in September.
For the first nine months of last year, tourist arrivals through the state's entry points rose five per cent to 12.5 million.
JCorp Hotels & Resorts Sdn Bhd deputy chief executive officer, Muhamad Mazlan Ali, said the hotels' upgrading work would start with the Puteri Pacific Johor Baru.
"The hotel, which opened in 1990, needs some refurbishments. To stay afloat, we have to upgrade our properties," Muhamad Mazlan told Business Times.
He said once the refurbishment exercise was completed in about a year or two, the company would review its pricing strategy upwards.
Currently, the average room rate in the Johor market is about RM180 a night.
JCorp Hotels, the hospitality arm of Johor Corp, owns and manages five properties in Johor.
Besides the Puteri Pacific Johor Baru and the Persada Johor International Convention Centre, it also owns Sibu Island Resort, Selesa Johor Baru and Selesa Pasir Gudang.
The company also has a property in Negri Sembilan called Selesa Port Dickson.
The six properties are worth as much as RM600 million.
Muhamad Mazlan acknowledged that Johor needed more hotels.
There are more than 4,000 rooms available in the two to five-star categories and this is expected to double by 2014.
However, they might not be sufficient to meet demand, he said.
"We expect room demand to increase with the expected influx of tourists and attractions.
"We are optimistic that the attractions in Johor will bring more people to the state.
"With more universities and colleges opening at EduCity, we can expect a large number of international students, too," he said.
EduCity is a fully integrated knowledge-based hub comprising world-class universities, industry-centric research and development clusters, international schools and colleges, as well as conference and exhibition amenities.
By Business Times
By end of this year, the RM350 million indoor theme park in Puteri Harbour, which is developed by government investment arm Khazanah Nasional Bhd, will open its doors.
In Nusajaya, Legoland Malaysia, which is being built at a cost of around RM750 million, is expected to open in September.
For the first nine months of last year, tourist arrivals through the state's entry points rose five per cent to 12.5 million.
JCorp Hotels & Resorts Sdn Bhd deputy chief executive officer, Muhamad Mazlan Ali, said the hotels' upgrading work would start with the Puteri Pacific Johor Baru.
"The hotel, which opened in 1990, needs some refurbishments. To stay afloat, we have to upgrade our properties," Muhamad Mazlan told Business Times.
He said once the refurbishment exercise was completed in about a year or two, the company would review its pricing strategy upwards.
Currently, the average room rate in the Johor market is about RM180 a night.
JCorp Hotels, the hospitality arm of Johor Corp, owns and manages five properties in Johor.
Besides the Puteri Pacific Johor Baru and the Persada Johor International Convention Centre, it also owns Sibu Island Resort, Selesa Johor Baru and Selesa Pasir Gudang.
The company also has a property in Negri Sembilan called Selesa Port Dickson.
The six properties are worth as much as RM600 million.
Muhamad Mazlan acknowledged that Johor needed more hotels.
There are more than 4,000 rooms available in the two to five-star categories and this is expected to double by 2014.
However, they might not be sufficient to meet demand, he said.
"We expect room demand to increase with the expected influx of tourists and attractions.
"We are optimistic that the attractions in Johor will bring more people to the state.
"With more universities and colleges opening at EduCity, we can expect a large number of international students, too," he said.
EduCity is a fully integrated knowledge-based hub comprising world-class universities, industry-centric research and development clusters, international schools and colleges, as well as conference and exhibition amenities.
By Business Times
Pink flamingos flock to i-City
BEAUTIFUL red and pink flying flamingos have “flocked” to i-City in Shah Alam, lighting up the nightscape with their beautiful glow.
Using state-of-the-art technology, the synchronisation of lights and movement simulates a flock of flamingos flying around i-City as part of its latest LED attractions this Chinese New Year to welcome visitors with good luck.
Flamingos signify wisdom and their presence at i-City is hoped to bring wisdom and prosperity in the new lunar year.
By The Star
Axis-REIT posts lower Q4 pre-tax profit
The pre-tax profit of Axis Real Estate Investment Trust (Axis-REIT) decreased to RM31.98 million in the fourth quarter ended Dec 31, 2011 from RM40.99 million in the same quarter last year.
In a filing to Bursa Malaysia today, Axis-REIT said revenue rose to RM29.81 million from RM26.6 million previously.
In view of the current satisfactory performance, the management is optimistic that the company will be able to maintain its current performance for the coming quarter and the rest of the financial year ended Dec 31, 2012.
By Bernama
In a filing to Bursa Malaysia today, Axis-REIT said revenue rose to RM29.81 million from RM26.6 million previously.
In view of the current satisfactory performance, the management is optimistic that the company will be able to maintain its current performance for the coming quarter and the rest of the financial year ended Dec 31, 2012.
By Bernama
Saturday, January 14, 2012
Oversupply of Klang Valley office space
While a 5% to 10% vacancy is normal for most buildings, the aggregate 22.6% across the office market is high. Apart from this, there are 18.59 million sq ft of incoming space (under various stages of construction) and a further 18.74 million sq ft of planned supply.
This is space that has been approved for development, but for which construction has not commenced as yet, as tallied by the National Property Information Centre or NAPIC.
There is also the possibility that the 18.74 million sq ft could balloon substantially if all the office space being contemplated now and in the near future, especially the Economic Transformation Plan (ETP) are taken into account.
Demand-supply dynamics
In the years to come, the challenge for developers of office space is to make extraordinary efforts to adjust supply to conditions in the market when their projects are due to come on-stream and to do as much of pre-letting as possible.
For owners of existing buildings, hang onto to your tenants! For regulators and lenders, watch this with greater interest.
Much hope hinges on the roll out of the ETP and how it will create new office space demand, and of the order required, to balance demand and supply.
Nevertheless, the office market cannot be looked at, solely, through the lens of total numbers. The market exists in various sub-markets, depending on location and product type.
Each segment has its own demand-supply dynamics. Rents drive the market and post-Global Financial Crisis (GFC), rental levels have dropped to about RM7 to RM8 per sq ft per month for average prime space.
At this level, the office market for average prime space for office buildings sold en bloc can sustain at RM700 to RM900 per sq ft based on its historical yield expectation of about 7% to 7.5%, but this figure is not carved in stone.
For the market to slip below this level, it will take a severe economic downturn. In short, office values are bouncing along around the bottom. Post-Asian Financial Crisis, values did dip below the replacement cost (as it was then), for a number of years.
In terms of office space, the Klang Valley, with an existing supply of more than 90 million sq ft, dominates, compared to Penang's 9.43 million sq ft and Johor Baru's 7.7 million sq ft.
Klang Valley's retail segment, comprising modern shopping centres, is relatively stronger than the office market segment because consumer spending has continued unabated.
But there are shadows of looming oversupply even in this segment. If inflation accelerates, or household spending is crimped, will there be consumer support?
But a well-managed retail centre by its inherent higher sophistication (than an office building), has better strength to tide over temporary downturns. Once a shopping centre has clientele loyalty, usually through a prolonged period of astute mall management, it is extremely difficult for new comers to dislodge it.
Real estate investment trusts or REITs have a heightened presence after the listing of Sunway REIT and CMMT are anchored with retail properties. The latest addition, the Pavilion REIT is also essentially a retail REIT.
REITs are generally defensive investments and are ideal for lowering volatility in a portfolio of stock and bond investments.
Role of a REIT
They are also particularly attractive during difficult economic periods such as, since 2008. They are more convenient proxies for physical property. For that reason, special tax benefits are showered on them.
But, as was seen during the last GFC, to perform true to form they should also display all their other attributes, i.e. a high degree of transparency, low borrowings, professional property management and the comfort that comes from a high degree of regulatory oversight.
REITs have also to display their ability as a sector, and as individual REITs, to ameliorate its greatest weakness i.e. its dependency on short term financing due to the requirement for it to distribute almost all its earnings, yearly.
During the days of easy money before the GFC, cheap financing was not a major issue, but it now is.
As a quid pro quo for favourable tax incentives, REITs are obliged to promote retail investors, apart from institutional investors, to participate in the REIT.
This will meet the regulators objective of deepening and broadening the capital market, and set the foundation for sophisticated products in the future such as the establishment of a property derivatives market.
Retail investors would also have tenancies that come with considerable visibility. REIT managers should provide information as this is the key driver of REIT proposition and not hide behind the guise of protectionism against competition.
The residential sector of the market, viewed from the perspective of the country as a whole, is fundamentally sound.
Losing balance
In the Klang Valley, where residential properties are generally 4 to 5 times annual household income, certain hotspots have elevated this ratio in recent years. Household income in the Klang Valley is about RM6,000 a month.
While house prices have increased, household income has not. Set against property prices, rental yield has dropped over the years, slipping below the critical 3% benchmark.
This is a cause for concern as yield should range between 3% and 6% (all risks net return) depending on house type and whether landed or strata.
Over the past six months, with the onset of greater volatility in global markets stemming mainly from the European sovereign debt crisis, sentiment has filtered down to the residential market in Kuala Lumpur.
Coupled with tightening measures by Bank Negara for loans, the market has slowed and demand has become subdued. It is hoped that this has taken some heat out of the speculative end of the market.
Keeping a look out
Going forward, into 2012, the issues that bear watching for the property market in Malaysia, are the continuing European debt crisis and the sluggish US economy and its effects on the global economy and the possible slowing of the Asian behemoths, China and India (which have regional implications).
There is also the possible General Elections in Malaysia (and its ramifications), the possible introduction of the Goods and Services Tax (affecting in particular house prices, developers and service apartments) and the possible unprecedented legislative introduction of a new, single mode of housing delivery by way of the “build then sell” system (humungous down-the-line implications).
There is a possibility of further tweaking of rules for housing loans (to possibly also contain household debt) and other possible monetary and fiscal measures (may be negative or uplifting for the property market) that may be put in place should the global economy weaken further.
Elvin Fernandez is the MD of property consultancy firm Khong & Jaafar Sdn Bhd.
By The Star
Big hypermarket operators keen on MetroCity
KUCHING: Chong Kia Hoi Realty Group is negotiating with three international brand hypermarket chain operators to operate Sarawak's biggest hypermarket in MetroCity, its flagship integrated new township development in Matang.
CKH Realty Group chairman and managing director Chong Kia Hoi said the three chain operators were the industry's “big names”, having several stores in Peninsular Malaysia, and that they were keen to expand their retail network to Sarawak. He declined to name the operators.
“Hopefully, we can seal the deal in two to three months,” Chong told StarBizWeek.
Tesco, Carrefour and Giant are the major foreign hypermarket and supermarket retail chain operators in Malaysia. Giant has spread its wings to Sarawak, opening two hypermarkets in Kuching, and one each in Sibu and Miri over the past six months.
Chong said an established local supermarket group had also expressed its interest in the proposed hypermarket.
He said the hypermarket would have a built-up area of between 120,000 and 150,000 sq ft, and 800 parking lots.
MetroCity is CKH Realty's most ambitious project and the largest single integrated township development in Kuching City North, where the Sarawak administrative centre is located.
The two-phase development has a gross development value of RM970mil and spans 74ha.
Phase I will be a commercial precinct comprising 314 units of three/four shophouses priced between RM850,000 and RM2.5mil, a commercial hall that will house the hypermarket, two three-storey showrooms, a private medical centre and a 120-room hotel.
It will also feature a fast-food restaurant, a trade service entertainment cineplex centre, a private food court and an integrated bus transit terminal and taxi station.
Phase II will be a residential development with more than 1,000 houses of various types.
Chong said more than 80% of the shophouses had been sold since their launch about three months ago.
“The entire development is expected to take eight to 10 years, and it will be financed with internal funding,” he said.
By The Star
Institutional funds invest in properties overseas to diversify portfolio
INSTITUTIONAL funds including Employees Provident Fund (EPF), Retirement Fund Inc (KWAP), Lembaga Tabung Haji (LTH) and Permodalan Nasional Bhd (PNB) are on the lookout for viable properties overseas to diversify their portfolio and to take advantage of the strong ringgit.
CB Richard Ellis executive director Paul Khong says overseas markets such as the UK's commercial property market offers long-term lease tenure which ensures a fairly stable rental income.
“As such, commercial properties with blue-chip tenants at high rental yields will be ideal for these funds,” he says.
Khong says the offshore diversification will ensure a more balanced portfolio for the funds. He says most of the purchases will be yield driven with different expectations in different countries.
“With the strong ringgit against the pound sterling and the deteriorating condition of the UK property market, more trophy properties are now available for sale. It is a good time to shop around for bargains selectively both big and small properties.
“The funds can expect to look at net returns of 5% to 6% currently for good quality assets in the UK,” he says.
Meanwhile, the strong Australian currency has driven up property prices Down Under.
Khong says Australia is getting pricey due to the exchange rate.
“Sydney and Melbourne are at the higher end of the curve in the residential market cycle but other areas in Brisbane and Gold Coast seem to be more attractive as their markets are at the lower end of the scale (where selective properties are coming in at close to 10% yield for a quick sale),” he adds.
Savills Rahim & Co head of overseas business development Chris Hahn says the markets in the UK and Australia are transparent with fierce competition for institutional-grade investment properties.
“Most investment properties in the UK and Australia are marketed worldwide by exclusive agents and in parallel with this institutional investors also pay for their own advice from agents or fund managers. Sellers of property can be assured that the global market is covered and fair prices are achieved,” Hahn says.
On the need for more public disclosure of the investment activities of the funds, Khong says: “Public funds should have a good level of transparency to ward off any unwanted concerns on any irregularity.”
Khong says the Securities Commission has done a good job in monitoring the actions of the public companies and having an independent authority to monitor transactions involving large amounts of public funds is good as it will encourage good corporate governance.
Hahn concurs, adding that making reports on the funds' performance public allows the people to monitor how these offshore investments are performing.
The EPF, which has allocated £1bil to invest in properties in the UK and other European markets has, to date, invested about half of that in a number of commercial buildings in London.
KWAP which has allocated 4% of its entire fund of RM3.2bil for property investments, has completed its acquisition of the 14-storey ASX building in Sydney, Australia, for A$185mil last December.
In 2010, KWAP bought 737 Bourke Street office building in Melbourne for A$113mil.
Besides Australia, KWAP is also eyeing some properties in London.
According to a Bloomberg report, PNB is in talks with German real estate fund KanAm Grund KAG over the sale of four London office buildings valued at about £1bil.
The German real estate fund is said to be in discussions with other bidders and “a deal could be done in a couple more weeks,” says Michael Birnbaum, a spokesman for the Frankfurt-based KanAm.
The buildings are the European Bank of Reconstruction and Development's head office next to Liverpool Street train station, the UK headquarters of Thomson Reuters in Canary Wharf, Deutsche Bank AG's UK headquarters on London Wall and an office building at 90 High Holborn.
The London assets are part of KanAm's suspended 3.97 billion-euro (US$5.1bil) Grundinvest fund.
Last December, PNB paid £350mil for the Milton & Shire House building in London and the fund says it is looking to add more British assets to its portfolio.
In 2010, PNB bought an upmarket office block in Brisbane, Australia, called Santos Place for more than A$290mil.
LTH plans to invest in syariah-compliant buildings in Australia.
By The Star
When informed decisions go awry
Making investments with money you don't have and with information you should not be privy to is both morally and legally wrong
LAST year, a young entrepreneur turned property investor lost his business outfit. Although his monthly income fluctuated somewhat month-to-month, he was able to get loans from the banks to finance his purchases, which he had incrementally amassed to about 10 over the years.
He was able to have a selection of properties because of the nature of his work which allowed him to source and research the sector and related industries. He was also a quick and adept student of the market and its trends, because like many Malaysians, he was interested in bricks and mortar as an investment instrument. It is uncertain how he will pay for all of them today.
Because of Malaysians' great love for properties, there is the tendency to buy multiple units, each in succession when the previous purchase is not yet fully paid for. While there is nothing wrong with this strategy some of us are more comfortable with properties than with other forms of investment instruments these “assets” can become a financial millstone. Quite a number of Malaysians bought multiple units at one go, sometimes in the same project because they have faith in the developer. Or they buy into the same segment, for example, condominiums.
If one has the means to hold on to these investments over the long term, there may not be an issue. The danger of multiple property purchases and ownership comes during a down cycle.
A couple of years ago when the property prices were steadily moving up, Malaysians' enchantment with the property market resulted in various courses being offered by property experts.
Nearly, if not all of them, were millionaires because of earlier property investments and they were offering courses to teach how one can become rich, like themselves.
However, the scenario then and the scenario today has changed drastically. It may not be possible to use the same strategy they had used. Like any investment, and at any one point in time, there are risks involved. But over and above taking a risk, there is something known as moral hazard. When risks become too high, the action taken by an investor may be hazardous and the probability of failure becomes very high. An action becomes morally hazardous when an investor makes a decision to do something assuming that he has a safety net.
Lately, there was a case where a spouse had bought two luxury condominiums with money that did not belong to him. Because properties at the time enjoyed high returns, he bought multiple units in Malaysia and Singapore. When the case came to light, he stressed that his wife, a public figure, is not involved.
A couple may not be a single entity from the legal standpoint. However, the reality is that the action of one will have a bearing on the other.
This was clearly seen early this week when the chairman of the Swiss National Bank, equivalent to our Bank Negara, resigned. Less than a week ago, he had denied any wrongdoing in a currency scandal that involved his wife.
The Financial Times reported that Philipp Hildebrand's wife had in September 2011 bought US$500,000 before the Swiss National Bank, headed by her husband, imposed a ceiling on the appreciating Swiss francs to halt its rise. Because Swiss francs was appreciating so quickly, the greenback became “cheap” by comparison. The move by the central bank sent the Swiss francs down sharply. She sold the dollars one month later. She bought the US dollar cheap and sold high.
Hildebrand had earlier rejected calls to resign. When he did, he said: “I came to the conclusion that it's not possible for me to deliver a definite proof that my wife requested the currency transation without my knowledge.”
His wife said she failed her husband because she had not considered the perception of a “conflict of interest.”
After his resignation, he asked rhetorically: “Can you live a dollar lifestyle, or a partly dollar lifestyle, like ours, and still be a central bank governor?”
That is an interesting question. It is a question of self examination that comes to each of us, at one point or another, sometimes many times over.
Assistant news editor Thean Lee Cheng ponders: Should the action of a spouse have far reaching consequences on the “innocent” half? Should one profit from one's vocation because of some privileged information?
By The Star
LAST year, a young entrepreneur turned property investor lost his business outfit. Although his monthly income fluctuated somewhat month-to-month, he was able to get loans from the banks to finance his purchases, which he had incrementally amassed to about 10 over the years.
He was able to have a selection of properties because of the nature of his work which allowed him to source and research the sector and related industries. He was also a quick and adept student of the market and its trends, because like many Malaysians, he was interested in bricks and mortar as an investment instrument. It is uncertain how he will pay for all of them today.
Because of Malaysians' great love for properties, there is the tendency to buy multiple units, each in succession when the previous purchase is not yet fully paid for. While there is nothing wrong with this strategy some of us are more comfortable with properties than with other forms of investment instruments these “assets” can become a financial millstone. Quite a number of Malaysians bought multiple units at one go, sometimes in the same project because they have faith in the developer. Or they buy into the same segment, for example, condominiums.
If one has the means to hold on to these investments over the long term, there may not be an issue. The danger of multiple property purchases and ownership comes during a down cycle.
A couple of years ago when the property prices were steadily moving up, Malaysians' enchantment with the property market resulted in various courses being offered by property experts.
Nearly, if not all of them, were millionaires because of earlier property investments and they were offering courses to teach how one can become rich, like themselves.
However, the scenario then and the scenario today has changed drastically. It may not be possible to use the same strategy they had used. Like any investment, and at any one point in time, there are risks involved. But over and above taking a risk, there is something known as moral hazard. When risks become too high, the action taken by an investor may be hazardous and the probability of failure becomes very high. An action becomes morally hazardous when an investor makes a decision to do something assuming that he has a safety net.
Lately, there was a case where a spouse had bought two luxury condominiums with money that did not belong to him. Because properties at the time enjoyed high returns, he bought multiple units in Malaysia and Singapore. When the case came to light, he stressed that his wife, a public figure, is not involved.
A couple may not be a single entity from the legal standpoint. However, the reality is that the action of one will have a bearing on the other.
This was clearly seen early this week when the chairman of the Swiss National Bank, equivalent to our Bank Negara, resigned. Less than a week ago, he had denied any wrongdoing in a currency scandal that involved his wife.
The Financial Times reported that Philipp Hildebrand's wife had in September 2011 bought US$500,000 before the Swiss National Bank, headed by her husband, imposed a ceiling on the appreciating Swiss francs to halt its rise. Because Swiss francs was appreciating so quickly, the greenback became “cheap” by comparison. The move by the central bank sent the Swiss francs down sharply. She sold the dollars one month later. She bought the US dollar cheap and sold high.
Hildebrand had earlier rejected calls to resign. When he did, he said: “I came to the conclusion that it's not possible for me to deliver a definite proof that my wife requested the currency transation without my knowledge.”
His wife said she failed her husband because she had not considered the perception of a “conflict of interest.”
After his resignation, he asked rhetorically: “Can you live a dollar lifestyle, or a partly dollar lifestyle, like ours, and still be a central bank governor?”
That is an interesting question. It is a question of self examination that comes to each of us, at one point or another, sometimes many times over.
Assistant news editor Thean Lee Cheng ponders: Should the action of a spouse have far reaching consequences on the “innocent” half? Should one profit from one's vocation because of some privileged information?
By The Star
The beauty of having choices
RECENTLY, a friend of mine purchased a house from the secondary market after months of careful deliberation. As he shared the joy of his new property purchase, it was heartening to note that many of his friends were also hunting for properties in both the primary and secondary property markets for investment purpose and/or for their children.
We often see two scenarios when it comes to the purchase of a home. Some favour purchasing a property directly from the developer and others, from the secondary market. Both groups, however, have a common agreement that neither option is right nor wrong since personal preference largely influences the acquisition of a property.
In Malaysia, both primary and secondary property markets offer plenty of choices in terms of property types and range of prices.
Properties from the secondary market are often viewed as ready to be occupied and most purchasers of such properties are generally satisfied with their acquisition based on the principle of “what you see is what you get”.
In fact, secondary properties are very popular in our country. According to statistics published by National Property Information Centre (NAPIC), the total residential property transactions in 2010 was 181,024 units, with 151,862 units transacted in the secondary market, and 29,162 units from the primary market. In short, 84% of the units transacted were completed properties from the secondary market.
On the other hand, newly-built properties bought directly from developers offer a different spectrum altogether. Purchasers of such properties generally look for specific locations or specific project features such as newly-developed areas near to commercial lots or recreational facilities, or projects with innovative elements etc. When buying a property directly from a developer, the purchaser expects to get a good deal compared to secondary market which has factored in price appreciation.
Some may perceive primary property market as containing higher risk as they purchase a property off the plan without seeing the real product. They will only realise their hope when the house is completed and handed over to them. As such, purchasers are advised to always consider the reputation and track records of property developers before making their commitment.
Being able to choose a property from the primary and secondary markets clearly facilitates a healthy environment where house buyers can enjoy the best of both worlds.
It was not surprising that the property development industry was jolted with many questions raised on the build-then-sell (BTS) concept when the Government announced last year that the same would be made mandatory by 2015. An immediate question came to mind ... “Are we ready for just one concept when we currently enjoy a choice?”
At present, almost all newly-built properties would fall under the sell-then-build (STB) concept. Purchasers would pay a 10% deposit or 20% initial payment of the purchase price with the remaining 90% or 80%, as the case may be, mostly financed by mortgage loans provided by banks. Servicing interest or instalment would begin immediately after the banks start to disburse the monies to the developers.
BTS on the other hand is a concept that allows house purchasers to pay the initial 10% deposit and not pay a single cent thereafter until the project is completed and the certificate of fitness is issued. In most cases, the construction period may last up to 3 years.
There are two sides of the coin on when to purchase a BTS concept property. Purchasing early provides the buyer a greater selection of units to choose from and more time to shop for good mortgages. Purchasing near the completion stage, on the other hand, provides the buyer the opportunity to have a physical view of the property (design and quality) and its surroundings (infrastructure, marketability etc). However, if the decision is made too late, the buyer may miss the opportunity to purchase a house from developer, and later has to pay higher price for a unit from the secondary market.
So how does BTS fit in today's picture?
Notwithstanding the difference in the duration to occupy the property (i.e. most “second hand” properties are fit for occupation immediately while newly-built properties have to wait for the certificate of fitness), properties in the secondary market are already adopting the BTS concept. Effectively, the purchaser can occupy the property once the remaining 90% payment is secured by the seller.
No doubt, the Government's move on BTS concept is mooted with good intention to protect consumers from suffering losses as a result of abandoned projects. However, a more holistic assessment of the concept needs to be undertaken before it is made mandatory. For instance, understanding and addressing the causes of abandoned projects whether they are due to economic downturn, inflation, fraud or management know-how, etc, are highly necessary.
As it is, there have been efforts to mitigate this problem in the form of stricter regulatory measures such as imposing hefty fines of between RM250,000 and RM500,000 and harsh jail term not exceeding three years for offences relating to housing abandonment by developers. The banks are required to assess the developers before offering bridging or mortgage loans and greater awareness campaigns highlighted by the media.
With a better understanding of BTS and its existence in today's environment as well as the need to holistically assess the concept before it is made mandatory, we need to ask ourselves again “Do we allow the free market to dictate how the industry should be shaped, such as by having both BTS and STB or just adopting the BTS concept solely?”
Something for everyone to ponder at the beginning of the year.
Datuk Alan Tong is the group chairman of Bukit Kiara Properties, he was the FIABCI world president in 2005-2006 and was recently named Property Man of The Year 2010 by FIABCI Malaysia.
By The Star
AEON to open at least five more malls by 2015
KUALA LUMPUR: AEON Co (M) Bhd, the Malaysian operator of the Japan-based Jusco retail supermarket, hypermarket and shopping malls, expects to open another five to eight shopping complexes by 2015.
AEON Asean vice-president and chief executive officer Nagahisa Oyama said currently the company owned and operated 28 shopping malls, with the latest opening in Rawang in December last year.
He said a shopping mall would usually cost some RM200mil, depending on location and arrangement with the developer.
“Sometimes we have to buy the land and build, sometimes the developer will construct it and we just have to run the business.
“These new shopping malls are at the planning stage. Therefore we do not have specific locations for the complexes yet,” he said after a welcoming ceremony for new Aeon staff yesterday.
By The Star
AEON Asean vice-president and chief executive officer Nagahisa Oyama said currently the company owned and operated 28 shopping malls, with the latest opening in Rawang in December last year.
He said a shopping mall would usually cost some RM200mil, depending on location and arrangement with the developer.
“Sometimes we have to buy the land and build, sometimes the developer will construct it and we just have to run the business.
“These new shopping malls are at the planning stage. Therefore we do not have specific locations for the complexes yet,” he said after a welcoming ceremony for new Aeon staff yesterday.
By The Star
UOA REIT posts higher pre-tax profit
KUALA LUMPUR: UOA Real Estate Investment Trust (UOA REIT) posted a higher pre-tax profit of RM41.87 million for the financial year ended December 31 2011 compared with RM25.08 million in the same period last year.
In a circular to Bursa Malaysia, the company said its revenue jumped to RM79.74 million from RM42.81 million previously.
By Business Times
In a circular to Bursa Malaysia, the company said its revenue jumped to RM79.74 million from RM42.81 million previously.
By Business Times
Mitrajaya unit accepts Putrajaya deal
KUALA LUMPUR: Mitrajaya Holdings Bhd announced that its wholly-owned subsidiary, Pembinaan Mitrajaya Sdn Bhd, has accepted a Letter of Award from Putrajaya Holdings Sdn Bhd.
The award is for the proposed construction and completion of residential and commercial units in Putrajaya for RM20.52 million, Mitrajaya told Bursa Malaysia.
By Business Times
The award is for the proposed construction and completion of residential and commercial units in Putrajaya for RM20.52 million, Mitrajaya told Bursa Malaysia.
By Business Times
Friday, January 13, 2012
Development in Shah Alam offers all the convenience
HYPERLINK Marbella homes in D’Kayangan, Shah Alam offers buyers the comfort of living in a low-density residential area.
The project will be developed under phase six of the D’Kayangan township and each unit is 28’ x 80’.
Kumpulan Lebar Daun executive director Noorazhar Mohamed Nurdin said only 102 homes would be built for this phase.
Noorazhar said each unit comes with a built-up area of 3,085sq ft.
He said the development is expected to be completed by August 2013.
“The hyperlink Marbella type A homes are spacious and built without borders,” he said, adding that the type B homes would have a built-up area of 3,368sq ft.
Noorazhar said the strategic location of the project itself was an unique selling point.
It is located at the former site of the Batu Tiga race course, he said, and was easily accessible via the NKVE, Elite Highway, GCE, Kesas, LKSA and KL-Klang Federal Highway.
“It is a gated and guarded community with perimeter wall fencing and a 24-hour security under a conducive environment.
“There are hypermarkets, education centres, shopping malls, sports facilities as well as golf courses near the site,” he said.
Noorazhar added that the development also comes with a scenic lake within walking distance.
He said the homes priced between RM958,888 and RM2.2mil were ideal for investment.
“We are confident that the homes will attract good response from investors and those who seek to upgrade their lifestyle,” he said.
A 3% discount is offered for the hyperlink homes to early birds for limited units only, buyers could enjoy savings of up to RM70,000.
Besides the Marbella, D’Kayangan Residence Semi-D type Alena (40’x 80’/50’ x 90’) and Semi-D Villa type Casa Ariana (60’ x 80’) are also available for sale.
A commercial project consisting of shop office and service apartment are among the other developments expected to be launched at D’ Kayangan this year.
The D’Kayangan township with a land area of 66ha comprises superlink and semi-detached homes, bungalow lots, a recreational and commercial centre.
By The Star
Lee Yan Lian's family’s land in Klang Valley up for sale
PETALING JAYA: Five parcels of freehold land in the Klang Valley owned by the late Tan Sri Lee Yan Lian's family have been put up for sale by tender.
A well-known philantrophist and community leader, Lee was a successful housing developer in the 1960s until his demise in 1983.
He is renowned for developing SEA Park in Petaling Jaya and Taman Tun Dr Ismail (TTDI), which was a joint venture with the Urban Development Authority.
Lee's SEA Housing Corp Sdn Bhd owned the 286ha of rubber estate land which was developed into the highly successful TTDI, an affluent township in Kuala Lumpur.
A property developer, who requested anonymity, said that the Lee family still owned a number of land in the Klang Valley and the five pieces advertised for sale were among the more prime parcels.
“These are among the last sizeable freehold land in the Klang Valley and will be suitable for redevelopment into mixed development projects,” he added.
In the latest sale tender, a 7,239-sq-ft land in the prime location of Jalan Bukit Bintang, Kuala Lumpur has a reserve price of RM50mil. The land is currently occupied by The Malaysia Hotel.
The second piece measuring 276,832 sq ft in 4 miles Old Klang Road (near the Pearl International Hotel) has a reserve price of RM90mil.
The other three parcels are located in Petaling Jaya.
A 265,245-sq-ft plot in Jalan SS23/15 in Taman SEA has a reserve price of RM150mil, and another piece of 82,715 sq ft in Jalan SS2/64, which is currently used as a car park, is going for RM100mil.
A vacant 84,315-sq-ft land made up of seven plots with old bungalows on two plots in Taman Tan Sri Lee Yan Lian in Section 16 has a reserve price of RM25mil.
The tender package can be purchased from Colliers International Property Consultants Sdn Bhd, the property agent appointed for the tender exercise.
A tenderer may purchase the individual property or all five properties. The last date for purchase of the tender package is Jan 16 and the closing date of the tender is at 1pm Jan 30.
By The Star
A well-known philantrophist and community leader, Lee was a successful housing developer in the 1960s until his demise in 1983.
He is renowned for developing SEA Park in Petaling Jaya and Taman Tun Dr Ismail (TTDI), which was a joint venture with the Urban Development Authority.
Lee's SEA Housing Corp Sdn Bhd owned the 286ha of rubber estate land which was developed into the highly successful TTDI, an affluent township in Kuala Lumpur.
A property developer, who requested anonymity, said that the Lee family still owned a number of land in the Klang Valley and the five pieces advertised for sale were among the more prime parcels.
“These are among the last sizeable freehold land in the Klang Valley and will be suitable for redevelopment into mixed development projects,” he added.
In the latest sale tender, a 7,239-sq-ft land in the prime location of Jalan Bukit Bintang, Kuala Lumpur has a reserve price of RM50mil. The land is currently occupied by The Malaysia Hotel.
The second piece measuring 276,832 sq ft in 4 miles Old Klang Road (near the Pearl International Hotel) has a reserve price of RM90mil.
The other three parcels are located in Petaling Jaya.
A 265,245-sq-ft plot in Jalan SS23/15 in Taman SEA has a reserve price of RM150mil, and another piece of 82,715 sq ft in Jalan SS2/64, which is currently used as a car park, is going for RM100mil.
A vacant 84,315-sq-ft land made up of seven plots with old bungalows on two plots in Taman Tan Sri Lee Yan Lian in Section 16 has a reserve price of RM25mil.
The tender package can be purchased from Colliers International Property Consultants Sdn Bhd, the property agent appointed for the tender exercise.
A tenderer may purchase the individual property or all five properties. The last date for purchase of the tender package is Jan 16 and the closing date of the tender is at 1pm Jan 30.
By The Star
UOA REIT FY11 pre-tax profit rises to RM41.9m
UOA Real Estate Investment Trust (UOA REIT) posted a higher pre-tax profit of RM41.87 million for the financial year ended Dec 31, 2011 compared with RM25.08 million in the same period last year.
In a circular to Bursa Malaysia, the company said its revenue jumped to RM79.74 million from RM42.81 million previously.
Going forward, the company said it would continue its efforts to further improve the occupancy rates of its property assets and anticipates the high
occupancy rates to sustain barring unforeseen circumstances.
"The manager will continue to adopt an active operating and capital management strategy to enhance the yields and returns of the existing
properties.
"The manager will also continue to seek opportunities to further acquire real estate that meets the objectives of the Trust," it added.
By Bernama
In a circular to Bursa Malaysia, the company said its revenue jumped to RM79.74 million from RM42.81 million previously.
Going forward, the company said it would continue its efforts to further improve the occupancy rates of its property assets and anticipates the high
occupancy rates to sustain barring unforeseen circumstances.
"The manager will continue to adopt an active operating and capital management strategy to enhance the yields and returns of the existing
properties.
"The manager will also continue to seek opportunities to further acquire real estate that meets the objectives of the Trust," it added.
By Bernama
Thursday, January 12, 2012
1MDB may sell sukuk to part-finance KLIFD project
KUALA LUMPUR: 1Malaysia Development Bhd (1MDB), a state-owned development company, may sell Islamic bonds to partly fund the construction of an US$8 billion (RM25.2 billion) financial district in Kuala Lumpur.
"We have a RM2 billion bridging loan coming due in 2013 and are looking at all options," chief executive officer Shahrol Halmi said in an interview in Kuala Lumpur yesterday.
"We may sell medium-term syariah-compliant notes if conditions are conducive."
1MDB is jointly developing the so-called Kuala Lumpur International Financial District (KLIFD) with Abu Dhabi's Mubadala Development Corp, said Shahrol.
The initial phase is due to start in the first half of this year at an estimated cost of RM2 billion and 1MDB may also look into setting up an Islamic real-estate fund for financing, he said.
The company, formerly known as Terengganu Investment Authority Bhd, last sold RM5 billion of 30-year syariah-compliant bonds in May 2009.
The debt, which was guaranteed by the Malaysian government, is rated A3 by Moody's Investors Service.
By Bloomberg
"We have a RM2 billion bridging loan coming due in 2013 and are looking at all options," chief executive officer Shahrol Halmi said in an interview in Kuala Lumpur yesterday.
"We may sell medium-term syariah-compliant notes if conditions are conducive."
1MDB is jointly developing the so-called Kuala Lumpur International Financial District (KLIFD) with Abu Dhabi's Mubadala Development Corp, said Shahrol.
The initial phase is due to start in the first half of this year at an estimated cost of RM2 billion and 1MDB may also look into setting up an Islamic real-estate fund for financing, he said.
The company, formerly known as Terengganu Investment Authority Bhd, last sold RM5 billion of 30-year syariah-compliant bonds in May 2009.
The debt, which was guaranteed by the Malaysian government, is rated A3 by Moody's Investors Service.
By Bloomberg
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